Law of Germany

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The modern German legal system is a system of law which is grounded in part on the principles laid out by the Basic Law for the Federal Republic of Germany, though much of the Bürgerliches Gesetzbuch was developed prior to the 1949 constitution.

It is composed of the Bürgerliches Gesetzbuch (civil law, Zivilrecht), criminal law, (Strafrecht), and public law (Öffentliches Recht)

1 Private law
- 1.1 Civil law
  - 1.1.1 General part
2 See also
3 External links

[edit] Private law

Private law (Privatrecht) rules the relations between two private legal entities (for example a buyer and a seller, an employer and an employee, a tenant and a landlord) or two entities that act on the same level as private persons (an authority buys its pencils from a private company). In contrast, whenever a state agency exercises official power, private law is not to applied.

[edit] Civil law

Main article: Bürgerliches Recht

Civil law (Bürgerliches Recht) determines the relationships between persons and/or legal entities, i.e. those who do not fall into a special category (like merchants or employees). The most important reference of this area is the Civil Law Book (Bürgerliches Gesetzbuch, BGB).

The most important principle of the BGB is Privatautonomie, which states that all citizens have the right to rule their own affairs without interference from the state, especially in the disposal of their property according to their will and the creation of contracts with partners and with the contents they like. Because of this, most of the rules in the BGB are only supplied in case that the partners of a contract did not make an agreement on that special point themselves. However, in the last few years there has been a tendency towards more regulation, especially between a professional and a consumer, declaring contracts invalid which place an undue burden on one party. Other groups of people that enjoy protection are minors and people in a weak economic position.

[edit] General part

The first of the five sections of the BGB is headed Allgemeiner Teil (general part). It contains rules that are important for the other four parts of the BGB and for law in general, such as provisions about juristic persons, the transferability of property (specifically, whether two things have a common legal fate because they "belong together" or whether they may be separated) protection of minors, the institution, termination and interpretation of contracts, the law of agency and regulations about limited and conditional contracts. The technique of putting rules, which are in force for other areas of law, into a general centeralized work is often used in whole German law and it is called Klammertechnik. It is borrowed from the system of pandects in the Corpus Juris Civilis instituted by Justinian I.

The declaration of intention (Willenserklärung) is an expression of one's will, which is connected to a certain legal consequence by law. This particular section is very important to legal transactions as well. It is analogous to an offer under the common law. A connection of one or more declarations of intentions which cause a legal consequence are termed legal transaction (Rechtsgeschäft)

According to §§ 133, 157 BGB declarations of will are to be interpreted from an objective point of view by a hypothetical neutral receiver in the same situation. For example: if a buyer demands a dozen apples and the seller agrees, they made a contract about twelve apples, even if either the buyer or the seller did not know, that a “dozen” is twelve and considered a dozen to be ten or twenty, because an objective receiver would interpret “dozen” as twelve. But there is one important exception: in case that both contract partners have the same wrong imagination of a certain term, that imagination becomes content of the contract. So if both the buyer and the seller considered a "dozen" to be twenty, they make a contract about twenty apples, although that's not the right meaning of the word, the first-year student invariably learns this concept (called falsa demonstratio non nocet = a false designation does not do harm) from a case nearly a hundred years old in which two contractors wanted to transfer whale meat, but made the contract in Norwegian and accidentally put "shark meat". The court ruled that the contract was over whale meat despite the text.

To the validity of a declaration of will not only the expression of the will, but also delivery (Abgabe) and reception (Zugang) are necessary. If the declaration of intent is in need of reception (empfangsbedürftig), then the notice cannot just be uttered, but also has to be brought to the attention of the recipient. The declaration of will is not valid until the receiver has the possibility to read it. If one sends an email at 11 p.m to a company, it is not valid until the next morning when the company opens and the receiver can be expected to see in his mailbox. On the other hand if the receiver forgets to check his mail or is in the habit of checking it only weekly, then the declaration has reached him at the moment when he can be expected to check his mails (usually every day) anyway. The finer points of this field are very much in doubt and often side points in litigation, where one side claims not to have received the message.

It is possible that the content of a declaration of will does not correspond with the real will of someone, for example if he makes a mistake by filling a form or if he is threatened to sign a contract although not wanting to do so.

In those cases the declaration of will is valid nevertheless, yet the law gives the declarer the opportunity to contest his declaration (Anfechtung) because of six reasons:

the declarer has been threatened to give his declaration (§ 123 BGB)
the declarer has been deceived to give his declaration (§ 123 BGB)
the declarer has wanted at the time to declare something else than he (accidentally) did (wrote 100,000 instead of 10,000)
the declarer has been in error concerning the meaning of his declaration (one of the famous cases of this is about the boarding school secretary who ordered toilet paper, and asked for "100 Gros Rollen", (100 gross = 14,400 rolls) thinking it meant "100 große Rollen" (100 large rolls).
the declarer has been in error about important features of something (for example didn't notice that the newspaper he has bought was from yesterday, excluded from this is the monetary value of something) (all according to § 119 BGB)
someone, used by the declarer to bring his declaration to the receiver (for example the son is sent to the neighbours), made such a mistake (§ 120 BGB).

On the other hand he can not contest his declaration for other reasons like errors of motivation or calculation, so someone is bound to her purchase of a gift for her husband even if she did not like the gift or she later realised that she cannot afford it. Note that if someone is directly forced to give a declaration, (for example if someone guides the hands of a person asleep to sign a contract), he cannot contest; with the declarer does not expressing any will such a happening is no declaration of will at all.

If the sender of the declaration contests it, the declaration is null and void, and has to be treated like it never existed (§ 142 BGB) and the same goes for the whole legal transaction. But if he has contested because of his own error, the contester has to compensate his contract partner for the damage, which his partner has suffered by trusting in the validity of the declaration (§ 122 BGB). For example if someone has ordered “Die Buddenbrooks” instead of “Der Zauberberg” by mistake and contested his order, when the company delivers “Die Buddenbrooks”, he does not have to pay the price of the book, but has to pay the costs of delivering it. In case that it has been a unique exemplar of the book and the company has refused an offer by another buyer because of the invalid contract with the contester, he has also to compensate the difference between the worth of the book and the price. But if the other buyer has offered to pay the double price the contester does not have to pay that difference, because his obligation to compensate the damage is bordered by the profit his contract partner would have made if his declaration has remained valid.

A declaration of will can be given not only by saying something, but by behaviour consistent with the will. If one were to walk into a shop, take a bottle of water and put it on the cash desk wordlessly, you express your will to buy that bottle for the stated price. In some business situations it is even unimportant whether someone expresses a will verbally in contradiction to his behaviour (venire contra factum proprium). For example if someone parks his car on a public watched parking lot and leaves it, then go to the parking attendant and says that he does not want his car to be watched nor will he pay the fee, the contract comes into existence nevertheless. The parking lot owner must protect the car and the driver later will have to pay for it.

Declarations of will are the cornerstones of legal transactions (Rechtsgeschäft). The BGB knows two types of such transactions: Verpflichtungsgeschäfte and Verfügungsgeschäfte. A Verpflichtungsgeschäft (obligating transaction) is a legal transaction by which someone is obligated to do or to refrain from doing something, for example to deliver a car, to pay a rent, to lend a sum of money, or to stop infringing on another person's property. Verpflichtungsgeschäfte often come in the form of contracts. Verfügungsgeschäfte (disposing transaction) on the other hand are legal transactions by which the status of a certain right is changed. For example if someone pays a price to the seller he changes the status of the right of property concerning that very sum of money as a part of his contractual obligation: the property right to that money is transferred from the buyer to the seller. Verfügungsgeschäfte are thus often used to fulfil the duties of Verpflichtungsgeschäfte: by signing a contract the car-seller gets the duty to deliver a car (Verpflichtungsgeschäft), he fulfils his duty by transferring the property rights on the car from his assets to the assets of his contract partner (Verfügungsgeschäft).

Furthermore Verpflichtungsgeschäfte usually have a certain cause in law. The seller of the car doesn't commit to delivering the car without a reason, the reason lies in the contract between him and the buyer, in the according duty of the buyer to pay the price. Consequently the contract is not valid when the reason is not clear. If someone obligates himself to give someone €100 and the both are not in agreement whether the money is donated or lent, there is no contract. Verfügungsgeschäfte by contrast do not have or need such a reason. It is unimportant why someone gives another one €100. The transfer is valid and the other one is the new owner of the money even if the giver gave the money just because of a contract, which is actually not valid.

It is important to keep both actions strictly separated. The buyer does not become owner of the goods by signing the purchase contract, but when the goods are given to him by the seller and when he is ready to transfer the property. Such transactions often take place at the same point of time in every day life, for example at the bakers´. Yet there can be a big space of time between Verfügungsgeschäft and Verpflichtungsgeschäft when for example someone buys something, which has just been built abroad. In the meantime the seller is free to make another contract with anyone else and to deliver the goods to him, with the legal consequence that the second buyer becomes owner of them.

The most contracts come into existence with offer (Angebot) and acceptance (Annahme), both are declarations of will. An offer must include the basics of the offered legal transaction. Whether those essentialia negotii are present is usually checked with the questions "Who is party to the contract?" "What is the target of the contract?" and "What, if any, is the cost?". It needs to be precise enough for the other party to be able to accept the offer with a simple "yes". If he wants to accept the offer but with other features, a lower price for example, he has refused the offer and has made a new offer by himself the same time (§ 150 II BGB). If the receiver of the offer simply says nothing he has also refused the offer. On the other hand the giver of an offer is bound to it as long as the receiver has time to accept it (§ 145 BGB). Usually the receiver has to decide immediately whether to accept or not, but he can also be given a certain time limit to think about the contract (§ 148 BGB). The offerer can (with limitations, see culpa in contrahendo below) retract the offer until it is accepted (§ 130 I 2).

Those legal terms are obviously very abstract must be “translated” into real business life. Thus, the jurist has to decide for example whether the owner of a shop has made an offer by laying things into the shelves and putting price tags on them, or whether the consumer makes the offer when he brings the goods to the cash desk to pay for it. That argument is quite important in case the shop owner or his employees had made a mistake in putting the prices, so that an expensive bottle of wine is assigned with only €4 instead of €40. If the laying out of the goods are already an offer the shop owner is bound to it and has to purchase the bottle of wine for just €4. Nevertheless today most jurists are in agreement that the consumer makes the offer by bringing the goods to the counter desk. The presentation of items is seen as merely an invitation to make an offer (invitatio ad offerendum), the same goes for advertisements in the media or window displays. Vending machines by contrast contain a real offer, so called offerta ad incertas personas (offer to indefinite persons). The offer is to sell for example a bottle of soda to the given price under the condition that the machine is not yet empty.

To be valid some contracts need special forms. They are only a few rules about it, most of the contracts can be made with an oral agreement (such as a purchase at the butcher's). But often the contract partners decide to use special forms although they are not demanded by law, especially for important contracts among strangers or continuing obligations.

The BGB knows five special forms above the oral contract to write down legal transactions: text form (Textform: any text readable, for example computer texts or faxes), scripture form (Schriftform: any durable written texts, for example signed purchase contracts), electronic form (the same as scripture form, but it is sufficient when the computer text is signed with a special electronic signature), notarial acts and contracts drawn up in public before a notary (this is mandatory for transferring property, § 311 b I). If a contract is not drawn in the correct form it is void (§ 125), but the deficiency can be healed in certain cases, for example the missing notarial corroboration over a promise to give a gift, by simply giving it (§ 518 I, II).

Finally contracts can be void because they are in contradiction to a special compulsory prohibition according to § 134 BGB (for example a drug deal) or with the Gute Sitten (morality) according to § 138 I BGB.

While the first condition is quite precise, the term Gute Sitten is unprecise and it is the task of jurisprudence and of the courts to fill such a term with content. Especially the following types of legal transactions are generally acknowledged to be immoral (sittenwidrig):

Contracts which would found the duty to do something reprehensible, for example to hire a killer or to bribe an official.
Contracts which gag one partner in his freedom of business, for example a tenancy agreement of a bar which obligates the tenant to buy only the beer of one of the hirer's brewery, and that for a very long time. (See restrictive trade practice for the common law equivalent.
Contracts whose conditions are unfair (very high prices for instance) because one of the partners has a monopoly.
Contracts which have special rules to secure the creditor much better than other creditors of the debitor. For example if the debitor gets the duty to transfer all his claims against his own debitors which would he ever gain to his creditor.
Legal transactions which are in contradiction to the family order, for example contracts to “buy” a wife (if such contracts are not already void because of the restrictions in transferrable property).
Contracts which would put poor people in debt, they could never pay back; for example the bank gives the credit only in case the debitor's son, who is economical dependent on this father, signs a debt guarantee, he could never pay back just for his father's sake without own interest.
Extreme disparity of benefit and consideration, when the contract partner is damnified with reprehensible disposition.
Pyramid scheme

In additions to that also usury is sittenwidrig and for that reason void (§ 138 II BGB).

Not everyone has the intellectual and emotional abilities to overview the consequences of his business behaviour. Such people are legally incapacitated (geschäftsunfähig). According to the law their declarations of will are null and void (§ 104 I BGB). They usually have proxies to do their business matters for them (parents for instance). Declarations of will, which are addressed to the legally incapacitated people (like cancellations) do not get valid with the access to them but to their proxies.

Legally incapacitated are especially minors and mentally ill people (§ 104 BGB), the rules about them are also applied for people who are not in control of their mind for some time because of being drunk for example (§ 105 II BGB). Yet incapacitated adults can make contracts of everyday life, which can be fulfilled at once (§ 105a BGB). For example a mentally incapacitated person can buy apples if they pay for them at once. Yet if they get to know a second-hand car dealer on the market and buys four cars, such contract would not be valid even if they could pay them at once.

Legally incapacitated people are even protected in case their contract partners do not know about their incapacity.

Human beings between the age of 7 and 18 are limited in their legal capacity (§ 106 BGB) (beschränkt geschäftsfähig). First of all that means that they can declare only such intentions which are only advantageous from a legal point of view (§ 107 BGB). For instance a minor can not buy a car, but accept the present of it. Note that the economical advantage of the legal transaction is not enough. If someone wants to sell a minor his car for €1, such a contract would be very advantageous for the minor from a financial point of view. Yet the child would acquire the duty to pay a certain (little) sum of money and that is why the transaction would have a little legal disadvantage and the minor's declaration of acceptance would be void.

All other declarations of will need the consent of the parents (or other legal guardians) to become valid (§ 108 BGB). Until that time the contract partner of the child has to opportunity to recall his own declaration of will if he did not know that the minor has been under-age by declaring his will (§ 109 BGB).

§ 110 BGB makes an important exception: parents can give their child a certain sum of money (for example his pocket money) to consume it according to his will. Contracts which could be fulfilled with that money are valid. So if the minor gets €3 each month she is able to buy all things cheaper than €30.

Furthermore the parents can give their consent to the child taking or job or running a business. In such case the minor has to right to do all legal transactions, which are in direct relationship to that matter, for example the trainee can buy working cloths while the under-age entrepreneur can hire employees and rent rooms (§ 112, 113 BGB).

Note, again, that it is important to differentiate between Verpflichtungsgeschäft and Verfügungsgeschäft. Verpflichtungsgeschäfte like purchase contracts etc. usually bring legal disadvantages (the minor receives the legal duty to pay his sweets). For that reason they need the consent of the parents. But if someone offers to give the child a suit (maybe to fulfil a contract between them) the child can agree, because that Verfügungsgeschäft makes it legal owner of the suit without having to shoulder other duties (the duty to pay it has nothing to do with the Verfügungsgeschäft, it derives from the contract, the Verpflichtungsgeschäft). On the other hand, when the child is given the suit, it would loose his claim for it (because the purchase contract would be fulfilled). If the child makes the suit so dirty on his way home that the suit cannot be cleaned anymore and becomes worthless for that reason, the children would retain the duty to pay for it. To avoid such solutions jurists are in agreement that a debt to a minor can not be fulfilled without consent of the parents. That means that the child can accept the given suit and becomes owner of it, but the contract is not fulfilled as long as the parents do not give consent to that legal transaction. If they refuse to do so, for example because the suit has been lost, the seller has to deliver a new suit to fulfil his contract duty. He can only get his suit back due to unjust enrichment (see below) which is impossible in that case for the suit isn´t in the possession of the child anymore.

In business or everyday life it is often not possible for someone to do this business matters by his own, either because he is legally incapacitated or his business is too big (a department store owner can not sell all his goods alone). For such cases the law gives the possibility to be represented by an agent (Vertreter). Declarations of will, given by the agent in the name of his principal, bind the latter one to the declarations made as his own, if the declaration has been made in the context of the agent's authorisation (Vertretungsmacht). If a lawyer's employee, sent to buy some paintings for the anteroom of the office, goes into a gallery, picks out some paintings and makes a purchase contract with the gallery owner, not he, but the lawyer is the contract partner of the gallery. He is obligated to pay the price and the gallery has the duty to send the paintings to him and not to his employee. That is also the case when the employee buys paintings, which his employer does not like or which are too expensive. If the employee is cheated by the gallery and for example buys a Von Uhde for a Van Gogh it is up to the lawyer to contest the contract.

On the other hand, if the employee exceeds the extent of his authorisation, the lawyer does not become contract partner. In our example the agent was told to buy a painting for the office. If he goes into a bookstore and buys some novels in the lawyer's name, not he but the agent receives the obligation to pay the books (except the lawyer, when being told so, validates the contract with the legal consequence that he becomes contract partner of the book store).

If the employee does not tell the gallery that he is acting in the name of the lawyer because he wants to avoid explanations or difficulties (maybe because the lawyer and the gallery owner being enemies) or he simply forgets to tell, he becomes contract partner, even he would never want to buy paintings for his own. That is due to the fact that usually sellers or buyers have a right to know their contract partners. In case that the seller really does not like the buyer or knows that the buyer is nearly bankrupt or is in the notorious habit of never paying his debts, his interest not to deal with such people must be protected. Since such an interest is weakened in dealings of everyday life, which are fulfilled immediately, the acting in the name of the contract partner is not necessary to bind him to the agent's declaration of will in suches business deals (the special rule is reduced by jurisdiction and legal doctrine because those cases were not seen by the lawmakers, when he made this norm). That's why if a daughter is given money and sent to buy a bunch of flowers as a present for her mother by her father, the latter one becomes contract partner, no matter what the daughters say to the shop keeper. In case the money turns out to be counterfeit money, the father and not his daughter has to duty to pay the flowers again.

The Vertretungsmacht (power to represent), which is given not by law, but by contract is called Vollmacht (authorisation). Between the giver of the authorisation and the proxy there is usually a special relationship, called Grundverhältnis (base relationship), for example a work contract. Furthermore, one must differentiate strictly between Innenvollmacht (internal authorisation) and Außenvollmacht (exterior authorisation). The Außenvollmacht is the authorisation, which affects outside, while the Innenvollmacht limits the Außenvollmacht in the inner relationship between the agent and the represented person. For instance if an entrepreneur hires a confidential clerk, he is usually given whole Vollmacht about anything concerning the company. The clerk uses that authorisation outside in negotiations with business partners. But such a Vollmacht can be restricted in the relationship between the confidential clerk and his employer, for example if the latter one directs his proxy not to buy goods more expensive than a certain level (Innenvollmacht). If the confidential clerk does not obey his employer's directions, the purchase contract about the expensive goods is valid, for the restricted authorisation the clerk had was not visible to the contract partner. The neglect of duty only has consequences in the Innenverhältnis: the clerk can be dismissed, or certain claims can be made against him. Only in case the contract partner knew, that the proxy exceeds his Innenvollmacht and works together with him, he is not worth of protection and so the contract is not valid (this is called collusion).

The same situation is given in cases of Duldungsvollmacht (authorisation by connivance) and Anscheinsvollmacht (authorisation by appearance). In the first case someone tolerates the behaviour of another who acts as his representative. For example the son, who has taken command over the family enterprise, does not intervene, although he knows that his father, now a retiree, sometimes orders little posts for the firm.

In the other case someone has negligently made another appear like an agent. For example, a company owner who has been represented by an employee for 20 years, does not inform his business partners about the recent dismissal. In both cases the contract partners could trust the acting of the alleged proxy because of their partner's negligence. So they are treated as if the authorisation was still in force.

In other cases, when someone is acting as an agent without having received any authorisation at all, no one but himself is bound to the contract. The false agent (falsus procurator) has either to fulfil the contract himself (for instance pay the purchase price of the book he bought in the name of another) or compensate the contract partners for all the expenditures he has made for trusting in the contract (for instance sending the book to his alleged contract partner).

Finally the law states that an Insichgeschäft (transaction with oneself) is not valid (§ 181). An Insichgeschäft is given when the agent makes a legal transaction either with oneself, or with the legal entity he works for on the one side and himself on the other side. For example A, the confidential clerk of company B, makes an agreement as proxy of B with himself as A to arise his salary. Strictly applied that rule would also not allow parents to give any presents to their children (they would have to make a contract with themselves as parents on the one side and as legal proxies of their children on the other side). Yet for such cases the norm is reduced teologically in order not to overstep its own reason for being (teleologische Reduktion).